Saipem: Not That Much Of A Beneficiary Of The Crisis

Valkyrie Trading SocietyInvesting Group LeaderFollow5ShareSaveCommentsSummarySaipem remains independent pre-merger with Subsea 7, but its valuation appears less compelling than peers like JGC Holdings despite its discount to Subsea 7.Margin expansion is notable, yet legacy poor-margin contracts still weigh on profitability, with some completing by mid-2026. So there's more boost to come to margins.Execution risks are now present, especially as 38% of the backlog is Middle East–exposed, and regional conflicts may delay contract signings and revenue.Despite decent guidance, valuation, and regional risks, temper enthusiasm for Saipem execution versus cheaper or more tactical alternatives in other sectors.The oil futures curve signals expectations of a return to normal rather soon, which may not be enough to spur more strategic asset development than at the previous pace.Looking for a helping hand in the market? Members of The Value Lab get exclusive ideas and guidance to navigate any climate. Learn More »Jeremy Poland/E+ via Getty Images Saipem (SAPMF) (SAPMY) continues to exist as an independent company going into its eventual merger with Subsea 7 (SUBCY). As of the latest results, it also continues to prove howThis article was written byValkyrie Trading Society5.53K FollowersFollowThe Valkyrie Trading Society is a team of analysts sharing high conviction and obscure developed market ideas that are downside limited and likely to generate non-correlated and outsized returns in the context of the current economic environment and forces. They are long-only investors.They lead the investing group The Value Lab where they offer members a portfolio with real time updates, chat to answer questions 24/7, regular global market news reports, feedback on member stock ideas, new trades monthly, quarterly earnings write-ups, and daily macro opinions.Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.